MORTGAGE DEAL ADDS BONUS TO ENCOURAGE SHORT SALE

BofA expands pilot program to qualified borrowers in U.S.

Chris Poston is close to short-selling his home in North Park and ridding himself of a mortgage payment that has bogged down his finances for two years.

As a bonus, Poston expects to get $13,000 in cash from Bank of America when he completes the short sale, a deal in which a lender agrees to accept a payment less than the outstanding mortgage amount.

Poston, who received the offer from the bank this week, is one of an unknown number of BofA borrowers in the nation who qualify for as much as $30,000 for completing certain short sales instead of walking away from their homes.

“I couldn’t be more happy,” said Poston, a graphic designer who bought his home in 2007. “It’s going to help me out a lot.”

Bank of America piloted the short-sale incentive program in Florida late last year. This week, the program was opened to all borrowers with loans owned and serviced by the bank.

The point of such programs, which are still relatively new, is to encourage borrowers to complete short sales so bank losses can be minimized. Foreclosures can be time-consuming and costly for everyone involved. Borrowers also benefit; they walk away with cash that could help them relocate.

Other major lenders, including Chase and Wells Fargo, have offered similar bonuses to homeowners since 2011, but offers appeared to be few and far between.

To get into the BofA program, borrowers must meet certain guidelines.

Sellers have to work with the lender to get a preapproved sale price before turning in a purchase offer to the bank. The short-sale process must begin before the end of this year and close by Sept. 16, 2013.

Short sales that are in progress but have not been closed may also be eligible. Poston, the North Park homeowner, is in this situation.

When he received the incentive offer in early May, he was already at the tail end of a short sale through a government program that helps homeowners complete lender-approved short sales.

The Bank of America letter says, “If you wish to participate: Do nothing. You will be enrolled automatically.” It adds that as long as Poston does not divert from the terms of his short-sale agreement, he will receive the bank’s $13,000 taxable incentive at closing. As part of the government program, Poston is expected to get an additional $3,000 to help with moving expenses.

Poston looks forward to shedding his mortgage, which he has struggled to pay after his work hours were cut and his monthly payments ballooned from $2,500 a month to $4,100 a month. After his delinquencies pushed him into bankruptcy, he realized it was time to short-sell his home or walk away.

He began the short-sale process three months ago and is expected to close soon.

“People in my situation, they need to call their banks,” Poston said.

Bank of America spokeswoman Jumana Bauwens said the company has paid out cash incentives to 847 completed short sales in Florida so far. The average payment has been about $12,000.